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In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 19.7% and declined 31% year over year. Meanwhile, the net revenues topped the same by 0.1%, and grew 8.9% year over year.
RH reported better-than-expected earnings in one of the past four quarters and missed on the remaining three occasions, the average surprise being 49.8%.
How Are RH’s Estimates Placed?
For the fiscal fourth quarter, the Zacks Consensus Estimate for earnings per share (EPS) has moved down to $2.21 from $2.24 in the past seven days. However, the newly estimated figure indicates an increase of 39.9% from $1.58 per share reported in the year-ago quarter.
The consensus mark for net revenues is pegged at $872.4 million, indicating growth of 7.4% from the year-ago figure of $812.4 million.
Factors That May Influence RH’s Quarterly Results
Revenues
RH’s top line is expected to have increased year over year in the fiscal fourth quarter, driven by continued gains from its product transformation and platform expansion efforts. The company continues to introduce new collections and concepts, which are likely to have supported demand. The rollout of immersive galleries and design ecosystems is expected to have enhanced customer engagement and sales productivity.
The company’s focus on building a global luxury brand through international expansion is expected to have contributed to growth. New galleries in key locations like Paris have been seeing strong demand and traffic, which is likely to have supported revenue visibility and brand awareness across global markets.
Moreover, RH’s expansion into hospitality and interior design services is likely to have created additional revenue streams. The integration of restaurants, design services and retail is expected to have strengthened the overall business model and supported top-line growth.
For the fiscal fourth quarter, RH expects revenues to grow year over year by 7-8%.
However, elevated tariffs and sourcing disruptions are expected to have created some pressure. Tariffs have been driving higher costs and causing delays in product flow, which might have led to some timing-related shifts in revenue recognition.
Margins
On the bottom-line front, RH’s earnings and margins are expected to have improved in the fiscal fourth quarter, supported by pricing actions and cost management efforts. The company continues to take price increases to offset tariff-related costs, which is likely to have supported margin expansion. RH’s ongoing resourcing efforts and vendor partnerships are expected to have aided cost efficiency. Inventory reduction initiatives and better operating discipline are likely to have enhanced margins alongside improved top-line leverage.
For the quarter to be reported, RH expects the adjusted operating margin to be between 12.5% and 13.5%, up from 11.3% reported in the year-ago quarter. Its expectations for adjusted EBITDA margin in the range of 18.7-19.6% also indicate year-over-year growth from 17.1%.
However, tariffs remain a key concern. The company expects an approximate 170 basis points impact on fourth-quarter operating margin from tariffs, while the full-year impact is estimated at around 90 basis points. These cost pressures and ongoing sourcing adjustments might have continued to weigh on margins.
What the Zacks Model Says for RH
Our proven model does not predict an earnings beat for RH this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.
RH’s Earnings ESP: The company has an Earnings ESP of +1.42%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
RH’s Zacks Rank: It currently carries a Zacks Rank of 4 (Sell).
Stocks With the Favorable Combination
Here are a few companies worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.
The consensus estimate for Hormel Foods’ quarterly revenues is pinned at $2.95 billion, which calls for 1.6% growth from the figure reported in the prior-year quarter. The Zacks Consensus Estimate for the upcoming quarter’s EPS is pegged at 35 cents, indicating flat year-over-year growth. HRL delivered a trailing four-quarter negative earnings surprise of 0.4%, on average.
Tyson Foods, Inc. (TSN - Free Report) currently has an Earnings ESP of +4.00% and a Zacks Rank of 3. The consensus estimate for Tyson Foods’ quarterly revenues is pinned at $13.80 billion, which indicates 5.5% growth from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for the upcoming quarter’s EPS is pegged at 81 cents, which implies a 12% decrease year over year. TSN delivered a trailing four-quarter earnings surprise of nearly 16.5%, on average.
Monster Beverage Corporation (MNST - Free Report) currently has an Earnings ESP of +0.60% and a Zacks Rank of 3. The consensus mark for the upcoming quarter’s revenues is pegged at $2.15 billion, which indicates an increase of 15.7% from the figure reported in the year-ago quarter.
The Zacks Consensus Estimate for Monster Beverage’s quarterly EPS of 53 cents implies an increase of 12.8% from 47 cents reported in the year-ago quarter. MNST delivered a trailing four-quarter earnings surprise of 7.8%, on average.
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RH Set to Report Q4 Earnings: Here's What Investors Must Know
Key Takeaways
RH (RH - Free Report) is scheduled to report its fourth-quarter fiscal 2025 (ended Jan. 31, 2026) results on March 31, after market close.
In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 19.7% and declined 31% year over year. Meanwhile, the net revenues topped the same by 0.1%, and grew 8.9% year over year.
RH reported better-than-expected earnings in one of the past four quarters and missed on the remaining three occasions, the average surprise being 49.8%.
How Are RH’s Estimates Placed?
For the fiscal fourth quarter, the Zacks Consensus Estimate for earnings per share (EPS) has moved down to $2.21 from $2.24 in the past seven days. However, the newly estimated figure indicates an increase of 39.9% from $1.58 per share reported in the year-ago quarter.
RH Price and EPS Surprise
RH price-eps-surprise | RH Quote
The consensus mark for net revenues is pegged at $872.4 million, indicating growth of 7.4% from the year-ago figure of $812.4 million.
Factors That May Influence RH’s Quarterly Results
Revenues
RH’s top line is expected to have increased year over year in the fiscal fourth quarter, driven by continued gains from its product transformation and platform expansion efforts. The company continues to introduce new collections and concepts, which are likely to have supported demand. The rollout of immersive galleries and design ecosystems is expected to have enhanced customer engagement and sales productivity.
The company’s focus on building a global luxury brand through international expansion is expected to have contributed to growth. New galleries in key locations like Paris have been seeing strong demand and traffic, which is likely to have supported revenue visibility and brand awareness across global markets.
Moreover, RH’s expansion into hospitality and interior design services is likely to have created additional revenue streams. The integration of restaurants, design services and retail is expected to have strengthened the overall business model and supported top-line growth.
For the fiscal fourth quarter, RH expects revenues to grow year over year by 7-8%.
However, elevated tariffs and sourcing disruptions are expected to have created some pressure. Tariffs have been driving higher costs and causing delays in product flow, which might have led to some timing-related shifts in revenue recognition.
Margins
On the bottom-line front, RH’s earnings and margins are expected to have improved in the fiscal fourth quarter, supported by pricing actions and cost management efforts. The company continues to take price increases to offset tariff-related costs, which is likely to have supported margin expansion. RH’s ongoing resourcing efforts and vendor partnerships are expected to have aided cost efficiency. Inventory reduction initiatives and better operating discipline are likely to have enhanced margins alongside improved top-line leverage.
For the quarter to be reported, RH expects the adjusted operating margin to be between 12.5% and 13.5%, up from 11.3% reported in the year-ago quarter. Its expectations for adjusted EBITDA margin in the range of 18.7-19.6% also indicate year-over-year growth from 17.1%.
However, tariffs remain a key concern. The company expects an approximate 170 basis points impact on fourth-quarter operating margin from tariffs, while the full-year impact is estimated at around 90 basis points. These cost pressures and ongoing sourcing adjustments might have continued to weigh on margins.
What the Zacks Model Says for RH
Our proven model does not predict an earnings beat for RH this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.
RH’s Earnings ESP: The company has an Earnings ESP of +1.42%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
RH’s Zacks Rank: It currently carries a Zacks Rank of 4 (Sell).
Stocks With the Favorable Combination
Here are a few companies worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.
Hormel Foods Corporation (HRL - Free Report) currently has an Earnings ESP of +1.70% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Hormel Foods’ quarterly revenues is pinned at $2.95 billion, which calls for 1.6% growth from the figure reported in the prior-year quarter. The Zacks Consensus Estimate for the upcoming quarter’s EPS is pegged at 35 cents, indicating flat year-over-year growth. HRL delivered a trailing four-quarter negative earnings surprise of 0.4%, on average.
Tyson Foods, Inc. (TSN - Free Report) currently has an Earnings ESP of +4.00% and a Zacks Rank of 3. The consensus estimate for Tyson Foods’ quarterly revenues is pinned at $13.80 billion, which indicates 5.5% growth from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for the upcoming quarter’s EPS is pegged at 81 cents, which implies a 12% decrease year over year. TSN delivered a trailing four-quarter earnings surprise of nearly 16.5%, on average.
Monster Beverage Corporation (MNST - Free Report) currently has an Earnings ESP of +0.60% and a Zacks Rank of 3. The consensus mark for the upcoming quarter’s revenues is pegged at $2.15 billion, which indicates an increase of 15.7% from the figure reported in the year-ago quarter.
The Zacks Consensus Estimate for Monster Beverage’s quarterly EPS of 53 cents implies an increase of 12.8% from 47 cents reported in the year-ago quarter. MNST delivered a trailing four-quarter earnings surprise of 7.8%, on average.